Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 18, Problem 18.7E
Share issue costs; issuance
• LO18–4
ICOT Industries issued 15 million of its $1 par common shares for $424 million on April 11. Legal, promotional, and accounting services necessary to effect the sale cost $2 million.
Required:
1. Prepare the
2. Explain how recording the share issue costs differs from the way debt issue costs are recorded.
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Students have asked these similar questions
Problem 15-7 (ACP)
Chaplain Company was very active in acquiring and selling
investments in equity securities. Data regarding the
securities are:
Cost
Market value
December 31, 2020
Trading securities
Securities not held for trading
5,000,000
3,000,000
4,600,000
3,100,000
December 31, 2021
Trading securities
Securities not held for trading
5,000,000
3,000,000
5,500,000
3,300,000
The entity made an irrevocable 'election to present changes
in fair value of the securities not held for trading in other
comprehensive income.
Required:
Prepare journal entries to recognize the changes in market
value for 2020 and 2021.
Problem 5-7 (IAA)
Bronze Company provided the following information at
year-end:
Share capital
Share premium
Cumulative translation adjustment - debit
Treasury shares, at cost
Retained earnings
Cumulative unrealized gain on option contract
designated as cash flow hedge
6,000,000
3,500,000
2,000,000
700,000
1,500,000
600,000
What is the shareholders' equity at year-end?
a. 9,500,000
b. 8,900,000
c. 7,400,000
d. 7,500,000
Exercise 18-9 (Algo) New equity issues; offerings announcements [LO18-4]
W
When companies offer new equity security issues, they publicize the offerings in the financial press and on Internet sites. Assume the
following were among the equity offerings reported in December 2024:
New Securities Issues
Equity
American Materials Transfer Corporation (AMTC)-8.0 million common shares, $0.001 par, priced at $14.816 each through underwriters
led by Second Tennessee Bank N.A. and Morgan, Dunavant & Company, according to a syndicate official.
Proactive Solutions Incorporated (PSI)-Offering of 9 million common shares, $0.01 par, was priced at $16.60 a share via lead manager
Stanley Brothers, Incorporated, according to a syndicate official.
Required:
Prepare the appropriate journal entries to record the sale of both issues to underwriters. Ignore share issue costs.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your…
Chapter 18 Solutions
Intermediate Accounting, 10 Ed
Ch. 18 - Identify and briefly describe the two primary...Ch. 18 - Prob. 18.2QCh. 18 - Prob. 18.3QCh. 18 - Prob. 18.4QCh. 18 - Prob. 18.5QCh. 18 - Prob. 18.6QCh. 18 - Prob. 18.7QCh. 18 - What is meant by a shareholders preemptive right?Ch. 18 - Terminology varies in the way companies...Ch. 18 - Most preferred shares are cumulative. Explain what...
Ch. 18 - The par value of shares historically indicated the...Ch. 18 - Prob. 18.12QCh. 18 - How do we report components of comprehensive...Ch. 18 - The balance sheet reports the balances of...Ch. 18 - At times, companies issue their shares for...Ch. 18 - Prob. 18.16QCh. 18 - The costs of legal, promotional, and accounting...Ch. 18 - When a corporation acquires its own shares, those...Ch. 18 - Discuss the conceptual basis for accounting for a...Ch. 18 - The prescribed accounting treatment for stock...Ch. 18 - Brandon Components declares a 2-for-1 stock split....Ch. 18 - What is a reverse stock split? What would be the...Ch. 18 - Suppose you own 80 shares of Facebook common stock...Ch. 18 - Prob. 18.24QCh. 18 - Comprehensive income LO181 Schaeffer Corporation...Ch. 18 - Stock issued LO184 Penne Pharmaceuticals sold 8...Ch. 18 - Prob. 18.3BECh. 18 - Prob. 18.4BECh. 18 - Prob. 18.5BECh. 18 - Retirement of shares LO185 Agee Storage issued 35...Ch. 18 - Treasury stock LO185 The Jennings Group...Ch. 18 - Prob. 18.8BECh. 18 - Prob. 18.9BECh. 18 - Property dividend LO187 Adams Moving and Storage,...Ch. 18 - Stock dividend LO188 On June 13, the board of...Ch. 18 - Prob. 18.14BECh. 18 - Stock split LO188 Refer to the situation...Ch. 18 - Prob. 18.16BECh. 18 - Prob. 18.2ECh. 18 - Earnings or OCI? LO182 Indicate by letter whether...Ch. 18 - Stock issued for cash; Wright Medical Group LO184...Ch. 18 - Issuance of shares; noncash consideration LO184...Ch. 18 - Prob. 18.6ECh. 18 - Share issue costs; issuance LO184 ICOT Industries...Ch. 18 - Prob. 18.14ECh. 18 - Prob. 18.16ECh. 18 - Prob. 18.20ECh. 18 - Prob. 18.22ECh. 18 - Prob. 18.25ECh. 18 - Various stock transactions; correction of journal...Ch. 18 - Prob. 18.1DMPCh. 18 - Prob. 18.6DMPCh. 18 - Prob. 18.8DMP
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